October 27, 2011
European leaders said they secured a deal to reduce Greece's debt after they labored overnight and into Thursday morning to find agreement on what they had billed as a blockbuster package to stem the Continent's debt crisis.
French President Nicolas Sarkozy said after the marathon negotiating session that the leaders had reached agreement with private banks on a "voluntary" 50% reduction of Greece's debt in the hands of private investors.
He also said they had agreed to expand the firepower of the euro zone's bailout vehicle, known as the European Financial Stability Facility, by four- or five-fold—suggesting it could provide guarantees for around €1 trillion, or about $1.4 trillion, of bonds issued by countries such as Spain and Italy.
Mr. Sarkozy expressed satisfaction that the Greek debt agreement wouldn't be forced on holders of Greek bonds. "France wanted to avoid the drama of a Greek default, when you remember the consequences of the failure of Lehman Brothers, and it's done," he said.
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Read the Euro Summit Statement
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